International Journal of Method Research & Application (2013) XXV, 3 © 2013 WACRA®. All rights reserved ISSN 1554-7752

CHALLENGES IN GREEN RETAILING

Shirley D. Ezell and Marcella M. Norwood University of Houston HOUSTON, TEXAS, U.S.A.

Abstract

The Case for “launching a new green retail business” will provide the readers and educators with an overview of some of the striking issues facing retailers in the green retailing movement in the current marketplace. The case will provide an overview of the plastic or challenges as retailers struggle to become green and also convert consumers to actual practice. The Startup Case will provide an example of an innovative Green Retail paint shop and the introduction of the store, product, social media, marketing challenges that were approached to become profitable in a large metropolitan city. The lessons to be learned provide new thinking on the state of the art of green retailing and new changes being undertaken and practiced in communities as well as creative business practices for retail innovators that want to enter the marketplace and be successful.

KEYWORDS : Green business, sustainability, paper or plastic , green paint, green retailing

INTRODUCTION

A compelling argument has grown globally for developing a sustainable environment. Healthy, sustainable communities operating as good stewards of the environment have become the basis for collaborative entities to examine such things as how global warming and climate change affect the environment and its effect on plants, animals, and humans as well as on the infrastructure of the world economies. The United Nations, on March 14, 2013 “stressed that the Sustainable Development Goals (SDGs) which are being formulated by Member States must address the environmental degradation that is threatening present and future generations.” [UN News Centre] The question “What is a sustainable environment?” could become overwhelming unless it is divided and subdivided into manageable parts which then may be examined. Effectively conserving resources to create a sustainable environment creates opportunities for generating forward thinking communities and protecting plants, animals, and humans while allowing individual economies to continue to make progress. Two topics are examined in this paper: shopping options and green paint options.

SHOPPING BAG HISTORY

The earliest shopping bags were made of leather in the Middle Ages. Once paper was invented and made less expensive through mass production customers carried parcels home from the store that were tied with string. Then in 1906, Vereinigte Papierwarenfabriken in Munich, , developed a called ‘Handfrei’ (hand free) which they patented. [Stromer] An open netted was produced beginning in the 1920s in Czechoslovakia using artificial silk yarn and other types of yarn, including wool. International Journal of Case Method Research & Application (2013) XXV, 3 169

These bags were gradually replaced by plastic bags. [Wikipedia] These bags were popular due to the low price, lightweight, and space saving aspects. Plastic bags became a modern convenience in 1973 when a commercial system for manufacturing plastic grocery bags became functional. Later in the 1970s supermarkets began offering these bags to their customers as an alternative to the paper bag. According to the Food Marketing Institute’s Backgrounder, “a paper bag requires four times more energy to produce than a plastic bag (2,511 BTUs vs. 594 BTUs) and the manufacturing process of paper bags generates 70 percent more air and 50 times more water pollutants than plastic bags.” Some people believe that plastic is more difficult to recycle than paper. The Food Marketing Institute and the American Chemistry Council report, “nearly twice as much energy is required to recycle a pound of paper than a pound of plastic.” [Morris]

PAPER, PLASTIC, OR NEITHER

Reuseit.com indicates there are four major issues the environmental impact of paper and plastic bags based on several studies: Issue 1: Energy and natural resources – based on a 2007 study by Boustead Consulting & Associates that indicates it take almost four times as much energy to manufacture a paper bag as it does to create a bag; Issue 2: Pollution – toxic chemicals used in creating paper contributes to air pollution, such as acid rain and water pollution (however, this is duplicated by compostable plastic bags); Issue 3: – according to the Wall Street Journal 85-90% are not recycled and 94.8% of plastic bags are not recycled according to Boustead Associates); and Issue 4: Degradability – temperature, pH, the type of bacteria present and the form of paper determine degradability of both products. Cities and states are considering banning or taxing plastic bags that are found in inappropriate locations such as floating in trees, stuck in sewers, clogging water sources, and drifting around public and private properties. Wikihow has even developed an article on Environmental Awareness on “How to Pick up ”! The steps include buying food items with less packaging and eating less processed or manufactured food as well as stopping littering or adding to litter (yourself). According to many sources, whales, dolphins, sea turtles and other marine mammals die every year after eating discarded plastic bags they mistake for food. According to a 2004 study by the French retailer Carrefour, “A reusable bag is better for the environment regardless of what it is made from, as long as it is used at least four times. Plastic bags make up a small portion of the trash that eventually is included in landfills. According to a study in San Francisco, there are more chewing gum wrappers or cigarette butts than plastic bags in landfills, but plastic bags are highly visible and become traps for fish, birds and other wildlife. [Ball] The Irish “plastax” decreased the use of plastic grocery bags by more than 90% in Ireland according to the same article in the Wall Street Journal. The city of Austin in Texas passed a ban on retail single-use bags that was to start on March 1, 2013. This ban was advertised on radio, TV, and in print at a cost of $850,000 to inform the public. The ban includes dry-cleaning bags, newspaper delivery bags, some types of takeout food bags and bags used for fish, meat, poultry, produce, bulk goods and pharmaceuticals. [Associated Press] The Austin American- Statesman reports retailers will be allowed to offer thicker plastic and paper bags with handles, which the city considers reusable. Retailers will decide whether to charge for those bags (exemptions include dry- cleaning bags, newspaper delivery bags, some types of takeout food bags and bags used for fish, meat, poultry, produce, bulk goods and pharmaceuticals). “The Texas Retailers Association filed a lawsuit claiming Austin’s bag ban violates a section of the state health and safety code, which prohibits municipalities from restricting the bags “for solid purposes.” The lawsuit cites the ordinance’s express language to back up its claim – that the “successful reduction of single-use carryout bags entering the city’s solid waste stream . . . will help the city achieve its goal of ‘Zero Waste’ by the year 2040.” “ [Smith, A.]

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REUSABLE BAGS

Seemingly reusable bags are the answer to the paper versus plastic debate. Environmentalists indicate high-quality reusable shopping bags made of materials that don’t harm the environment and are not discarded after one use are the answer to this conundrum. However, even reusable bags have their downside. In Oregon, norovirus infections were traced to a reusable grocery bag that had been contaminated. [Aleccia] Health concerns are also based on bags imported from China and other countries, many of which have been found to contain dangerous levels of lead that can rub off onto food, permitting families to ingest that contaminant. “A study by the University of Arizona found that half of all reusable bags contained food-borne bacteria, like salmonella. Twelve percent contained E. coli, indicating the presence of fecal matter and other pathogens. [Gerba] These bacteria continue to exist in reusable bags unless they are “cleaned properly after each use with hot, 140-degree temperature soapy water. [Environment and Plastics Industry Council] A ban on plastic bag use in California led to an increase in E. coli infections by 40% in the three months following the adoption of that ban. [Larsen] According to this same web site, a study published in 2011 in Food Protection Trends determined that 51% of all reusable grocery bags contain coliform bacteria, indicating the presence of feces. “In addition, most people do not use separate bags for raw meat and for ready-to-eat foods, including fresh vegetables and fruit as well as that 97% f consumers said, “They never wash their reusable grocery bags.” [Larsen] Sustainable Living, from the University of Connecticut indicates that 40% of these bags have molds and yeast that can cause allergic reactions and infections. Larsen also says that reusable bags adversely affect the environment. A February 2011 report included a study by the U.K. government indicating that standard reusable cotton grocery bags must be reused 131 times “to ensure that they have lower global warming potential than” a single use of a plastic bag. [U.K. Environmental Agency]

UNINTENDED CONSEQUENCES OF SUSTAINABILLITY

Concord, Massachusetts, became the first U.S. city to ban sales of single-serve plastic water . Residents indicated that this ban deprived residents and visitors the ability to choose their beverages. Interestingly a few weeks after the vote to ban bottled water a huge water main connecting the Quabbin Reservoir to Boston blew a seal and was shut down for days cutting off water to over 30 communities. [Smart Planet] Shoplifting appears to be the result of the plastic bag ban in Seattle, Washington, according to storeowners. The ban on plastic bags required businesses to charge five cents for paper bags, which city council members thought, would improve the environment. However, one Seattle grocery store indicates that the bag ban is contributing to thousands of dollars in losses. Mike Duke of Lake City Grocery Outlet indicates that the ban has resulted in at least $5,000 in produce losses and between $3,000 and $4,000 in frozen food losses. The Lake City Grocery Outlet also indicated there was a large increase in hand baskets stolen after the ban started. [McNerthney] The mayor of Solana Beach in California was a proponent of the city’s plastic bag ban, but now wants the city council to rethink its decision and remove that ban. Stores report several issues since the ban: 1) customers refuse to spend 10 cents for a paper bag and therefore must carry individual items in a “juggling act”; 2) Vons indicates a 25% drop in business, also indicating that 300 plastic grocery baskets have been stolen by customers; and 3) residents are shopping outside the city for the most part because of the ban. The former mayor has decided the ban is hurting the city both economically and environmentally. [Phillips] Georgetown, Texas, has developed a procedure to help in the recycling process since a discovery that the plastic bags get caught in recycling machinery. The city provides two (2) special yellow “stuffer” bags a month for residents to use to submit plastic bags, newspaper sleeves, dry-cleaning bags, and cereal bags. These yellow bags allow the recycling plant to sort out the plastic bags. [Stoll] “Discarded plastic bags have become so common in Africa they have spawned a cottage industry. People there collect the bags and use them to weave hats, bags and other goods. According to the BBC, one such group routinely collects 30,000 bags every month.” [West]

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PLASTIC, PAPER, OR REUSEABLE?

Leslie Richardson, the major of Aurora, Colorado is watching the clock so that she does not miss the city council meeting. She has an interesting proposal on the table to request to have all the grocery businesses in the town require using only paper bags in their organizations. If the first experiment is successful, the next proposal will expand to all the retail businesses in the community to eliminate plastic bags. The local paper mill has extended an offer that they would pick up all paper bags from the grocery stores and recycle them for free to be used by customers. This offer would allow customers to use their paper bags and bring them back to the stores for recycling. In addition, the paper mill will work with the City Sanitation Department to add recycling bands for consumers to send all their paper back for recycling with their garbage pickups. This proposal would hopefully take care of the sanitation concerns on the recycling of paper bags. Aurora, Colorado is filled with environmentally committed consumers, so Leslie does not anticipate a consumer backlash. However, an interesting issue is how each of the council members will relate to this new idea. One member has a family tie to a large grocery chain and it is unclear where that member stands on the issue. Another member always votes no on any recommendations for business from the city because they do not want to support what they consider interference with small businesses. The third member has an uncle in the next city who works for a chemical plant and it is unclear what his position will be since this might have some potential impact on the chemical business. So, as the mayor is weighing all the options, it is unclear what the voting will look like when the council meeting begins.

GREEN PAINT

Sustainable paint should help protect ecosystems and maintain natural resources. Volatile organic compounds (VOCs) have been the focus until very recently. Technology has allowed water-based formulas, light reflective palettes, sustainable graffiti removal systems, which allows paint to be sustainable at low or zero VOC levels. [Glidden] “Kelly-Moore Paints pioneered the concept of recycling paint about 15 years ago. Manufacturers Dunn-Edwards and MetroPaint also recycle their paints. “We make it known to our contractors and accounts that we are environmentally friendly and recycle. If they bring back their abundance of product, we remanufacture it.” Says Dan Saldivar, national accounts manager for Kelly-Moore. [Curtland] Sherwin-Williams’ Emerald line utilizes soybean and sunflower oils and the resin contains recycled plastic bottles using a different approach than other manufacturers. Some manufacturers include bio-based materials while others are 100% natural. One product, Unearthed Paints, creates , plaster, and finishes from clay, chalk, lime, and Italian marble including vegetable casein protein as a binding agent (similar to milk paints but without the odors and environmental concerns). Unearthed Paints colors their pain with mineral pigments and are available in up to 35 colors, each with three different shades. [Curtland]

LONGEVITY AND PERFORMANCE

People who purchase paint still require paint to be durable and long lasting. A big advantage of green paint is that it doesn’t have the odor associated with less eco-friendly paints since it doesn’t include the solvents in those types of paint. These paints are nearly odorless, extremely washable and provide excellent coverage when applied. Other aspects that people want include mildew resistance, gloss or mat surface, and ability to be washed. Mildew resistance is essential for locations such as kitchens and bathrooms. Mat finish is generally the least durable paint. When locations such as hospitals need to be painted, no odor and washability are important considerations. Being able to wash the paint means more time between paint applications and in the long run saves money as well as time.

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STANDARDS FOR GREEN PAINT

Certifications for green building are becoming more rigorous. “To be classified as low-VOC paint, the EPA and other government organizations require VOCs to be limited to 50 grams per liter of paint for industrial applications.” “Green paint that meets these environmental standards has 20 to 30 percent of the VOCs of traditional paint.” [Wroblaski] The American National Standards Institute (ANSI) classifies paints “according to properties that include chemical composition, corrosion resistance, hazard potential, and reflectivity.” [Westerkamp] The purchaser should look for the ANSI mark on the .

Life-Cycle Costs Such issues as paint quality, sustainability, cost, and performance must be balanced. Costs will include materials such as paint, brushes, rollers, sprayers, tarps, ladders, masking tape, gloves, and safety . Other costs include preparation labor, application labor, cleanup and disposal of the paint itself. The longer the paint lasts, preventing frequent application, the lower the cost for the previously listed components. “Paints that are more environmentally responsible and contain few or no VOCs can cost 50 percent more than paints with higher VOCs.” [Westerkamp] However, these costs are coming down.

LAUNCHING A NEW GREEN RETAIL BUSINESS: THE GREEN PAINTER

The Green Painter was launched in 2011 in Houston, Texas as an extension of an interior green business - New Living. It was the brainchild of Jeff Kaplan who was committed to developing a paint for healthy homes that was non-toxic. His definition of non-toxic was absence of all the chemicals like VOC organic compounds, xylene, formaldehyde and other chemicals still found in the traditional paints in the marketplace. The selling of non-toxic paint started in New Living and it was mixed at a local community center, now with the introduction of The Green Painter, a company was preparing the basic paint and the store could add the colors desired by the customer. He leased a space next door to his green interior retail store and developed what was basically described as a shop and shop business. His goal was to improve the turn of the business started as an area within New Living and move the entire inventory in 60 days, which is a goal that he is meeting in 2013. In 2011 the turn was approximately 90 days at best.

THE CHALLENGES OF A GREEN PAINT BUSINESS

The early challenges for building a green paint business were to develop a paint that priced at the same level of other traditional paints, and then to market that product to painters and contractors. The business model unfolded with recognition that women generally choose the paint color, but men traditionally handled the painting or contracting the paint jobs. In Texas the paint workforce are dominated by Hispanics who exhibited great hesitation and Jeff described it as fear- of using this new green product. The fact that it was without chemicals was suspect at best, and they were generally reluctant to use the product because they assumed it was inferior. The paint was affordable, and it was a breakthrough product because it could take any color and was designed for use in hot humid climates. So one of the early challenges was how to create a workforce of painters that would use his new paint products.

MEETING THE PAINT WORKFORCE CHALLENGE

Jeff is an entrepreneur and he came up with an experimental idea of creating a new cadre of painters. He hired artists and certified them to use his products and enter the painting business. To date he has 20 painters joined in this new breed of painters that are forging the mission of painting using healthy paint products. Jeff will continue to recruit artists and others to join this paint revolution and is creating a new culture of painters. This entire venture is described as a business mission that makes sustainability accessible and affordable. Jeff describes his business as like opening a Whole Foods grocery store in Houston Texas in 1970- and what a ride it has been! International Journal of Case Method Research & Application (2013) XXV, 3 173

CULTURE IS THE BUSINESS

The Green Painter is owned by a social entrepreneur who focuses on market-based solutions for the social environment, and his business is focused on healthy homes, furniture, paint and design. He has been fortunate to have the time to make mistakes, to take risks while always managing the downside of the business. He now has sold 50% of his business to 10 investors so that he has the capitol to expand. He continues to dream of new ideas, and focuses his business to succeed in the marketplace. In this culture, his customer is the young 20-40 year old woman with a family who is committed to a healthy lifestyle for her family. So the owners do understand their customers and they continue to expand their business to provide unique products and services for their customers.

FURNITURE AS A NEW BUSINESS VENTURE

Another addition to the business in the last 9 months has been the design of furniture from reclaimed wood. The designs are unique and now the store has incorporated a wood shop to design and produce one of a kind furniture. So the stains sold in The Green Painter are used to provide a safe and colored sealer to desks, dining tables, end tables, bed frames and unique pieces of design furniture for their customers. The designs are each a work of art and add a great deal of artistic interest in their store. The price points are $1000.00 and up for most of the furniture pieces produced by artists in their workshop. They carry one other small line of wood furniture from a manufacturer that uses reclaimed wood. This represents another way to link products across the two business ventures - New Living and the Green Painter.

THE INTERNET WEBSITE AND THE GREEN PAINTER

A website for The Green Painter was launched - but in the last 9 months this site has only introduced the brand and has not generated sales. At this point- the conclusion is that people want to see the paint colors and they are more comfortable coming into a store than buying these products on line. The Internet business is being used for marketing at this point and perhaps it will move forward when the brand has greater saturation in the marketplace. For now the appeal seems to be for brick and mortar rather than the Internet for green paints sales.

THE BUSINESS MODEL

The original business plan that was designed for the first business did not really work. So this has been a great continuing experiment since there were not any stores or totally green retailers to use as business models. This grand experiment has been a work of love and focused mission - and it is now successful. A new store is being opened in about two weeks in March in the Heights area of Houston - with a Green Paint store and a mini new living store upstairs. It will be a fun place to shop where people can bring in old furniture and antiques and have them refinished or work on them inside the store with help from the design staff. This is a part of building the green community of consumers and is also part of the educational venture that has always been a part of their culture of doing business. The store is currently splitting their business profit with about 30% for furniture, 30% for paint, 30% mattresses, and 10% design services. They are currently negotiating offering their paint products in Whole Foods, which would expand their brand into new markets. This is a model that is predicted to continue, but the owners are continually looking for new ideas to expand their green retailing business and to offer their marketplace something special. The future of Green Retailing is still evolving and social entrepreneurs are at the core of their success. Hopefully universities will continue to educate their students to embrace the concepts of sustainability and recycling with a value system for reasonable consumption. New Living and the Green Painter were the first brick and mortar businesses to receive B Corp Certification and they are very proud of their accomplishments. The future holds great promise.

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THE STORY DOES NOT STOP HERE

The interest in recycling and sustainability has sparked some new social entrepreneurs and they may be in your own communities. A recent article in a Houston newspaper showcased an example of a new office building for T.J. Barnett - featuring artwork from reclaimed materials. The building cost $50,000 and the owner runs Phoenix Connection building attractive, super cheap one of a kind houses made chiefly from objects destined for the dumpster - Pyrex cookware becomes round windows, old wine corks are transformed into cork flooring and license plates are roof shingles. In addition, they have designed the distinctive door handles for an office building. So this story continues as business owners transform green retailing and change consumer behavior one company at a time. And that is part of the new spirit for the social entrepreneur that is changing the green retailing landscape. Perhaps another way to look at sustainability is through the lens of architect William McDonough. He supports a micro view of upcycling, which reconfigures our approach where we create systems that move in an upward motion, which ensures that things come back so people can reuse them. And the images are fascinating- turning fences surrounding highways into solar-power collectors, sewage-treatment centers into fertilizer- making nutrition-management systems. And lastly he offers practices for the individual consumer- buying products that are Cradle to Cradle certified which ensures that the products are created using waste free systems and exercising the buying power that encourages businesses in general to adopt this new sustainability, green retailing, upcycling thinking.

Questions for the Paper vs. Plastic Case

After reading the research on the challenges for paper versus plastic, how would you advise Leslie to proceed?

1. Review the literature and look at both sides of issues for plastic versus paper and make a list of tradeoffs. 2. How would you recommend the mayor vote on this proposal?

Questions for Green Paint Case

1. If you were starting a green business in the next 5 years – how would you design the business model? What lessons would you learn from the Green Painter?

Answers - visit successful green companies for ideas, develop a business plan that is flexible and reasonable, and try to enter the market without a great deal of debt. Be open to new ideas, and be close to your customers, which translates being in the community with educational programs and focusing each day on developing new business and loyal customers. Expect the profit and returns to be slow but challenging with a great deal of satisfaction in creating a sustainable business environment that contributes to a better and healthier lifestyle for your customers.

2. Research the current business practices being used in the food and retail industries in general and report practices that will help you develop your business.

This can be completed by beginning with businesses like Patagonia, Wal-Mart, Whole Foods, Target, and Starbucks as a starting point and expanded.

3. Research the requirements for a B Corp Certification (benefit corporation) and describe the benefits for the marketplace and the consumer. The search may begin at www.benefitcorp.net.

A benefit corporation is a form of for-profit charity. The company must publicly report on their social and environmental performances using established third-party standards.

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REFERENCES

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Ball, Jeffrey. “Paper or Plastic? A New Look at the Bag Scourge.” Wall Street Journal, 2009.

Curtland, Christopher. “Green Sustainable Paint Solutions, Whether natural or recycled, green paints can enhance sustainability.” Downloaded 2/26/2013 from http://www.buildings.com/article-details/ articleid/14433/title/green%20sustainable%20paint%20solutions.aspx

Gerba, Charles. “Assessment of the Potential for Cross Contamination of Food Products by Reusable Shopping Bags.” June 9, 2010.

Glidden Professional. “What Makes a Paint Sustainable: VOCs and Beyond. Downloaded 2/26/2013 from http://continuingeducation.construction.com/crs.php?L=222&C=759

Larson, Linda. “E. coli Infections Spike After Plastic Bag Ban in California.” Food Poisoning Bulletin. February 10, 2013. Downloaded 2/13/2013 from: http://foodpoisoningbulletin.com/2013/e-coli-infections- spike-after-plastic-bag-ban-in-california/

McNerthney, Casey. “Store owners say plastic bag ban causes more shoplifting.” Seattlepi.com. 2/28/2013. Downloaded3/5/2013 from http://www.seattlepi.com/local/article/Store-owners-say-plastic-bag- ban-causes-more-4314744.php

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Phillips, Preston. “Ex-mayor of Solana Beach wants plastic bag ban overturned, Celine Olson initially supported ban.” Scripps Media, Inc. 3/5/2013.

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Smart Planet. “Single-serve water bottles are banned in Concord, Mass.” http://multibriefs.com/ ShareArticle.php?50f5676e2946b AlsoWCVB.com The Boston Channel “MWRA Water Main Break Triggers State Of Emergency, Boil Water Order Issued For Eastern Massachusetts.” May 2, 2010. http://www.wcvb.com/MWRA-Water-Main-Break-Triggers-State-Of-Emergency/-/9849586/11292320/- /item/1/-/4xer97z/-/index.html )

Smith, Amy. “Then There’s This: In the Bag.” The Austin Chronicle. Downloaded 3/19/2013 from http://www.austinchronicle.com/news/2013-03-01/then-theres-this-in-the-bag/print/

Stoll, Natalie. “Yellow bags help Georgetown go green, Plan goes beyond grocery bags.” KXAN. 1/22/2013.

Stromer, Marie-Luise. “The history of paper shopping bags. September 4, 2009. http://www.helium.com/items/1576117-paper-shopping-bags

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West, Larry. “Paper, Plastic, or Something Better?” About.com Environmental Issues. Downloaded January 9, 2013 from http://environment.about.com/od/recycling/a/reusablebags.htm .

Westerkamp, Thomas A. “Specifying Sustainable Paints Means Determining Life-Cycle Costs.” Downloaded 2/26/2013 from http://www.facilitiesnet.com/paintscoatings/article/Specifying-Sustainable- Paints-Means-Determining-LifeCycle-Costs--12828

wikiHow. “How to Pick up Litter.” Downloaded 3/13/2013 from http://www.wikihow.com/Pick-up-Litter

Wikipedia. “String bag.” Downloaded 2/28/2013. http://en.wikipedia.org/wiki/String_bag

Wroblaski, Kylie. “Pick the Perfect Paint.” Downloaded 2/28/2013 from http://www.buildings.com/ article-details/articleid/9687.aspx

______. “A Microbiological Study of Reusable Bags and ‘First or single-use’ Plastic Bags.” Environment and Plastics Industry Council. May 20, 2009.